S&P futures are up 6-7 handles this morning as we have some mixed markets around the World. Yesterday the S&P held its 21-day MA and bounced off it well. Pressing shorts hasn't really worked for much of 2013.
The question now is: was that the August correction? At this point we have a new upper range with some mixed signals. If the bulls reclaim and close the market back above the 1698-1702 area that would give us some more clarity.
There is still some nice individual stock action to trade if you don't want to have too much risk on, but want to be involved. In today's Morning Call we will go over some good set-ups in strong stocks.
LinkedIn (LNKD) breached the gap support at $228.80 after holding above this level for 2-3 sessions after its earnings. Buyers stepped in at $227.28 to lift the stock up as it closed on highs to register 0.50% of gains. This is a good looking chart. Look for potential continuation above yesterday's high of $233.21.
Facebook (FB) also sold off in the morning together with the market, but it found strong support at its 8-day at $37.70 to bounced off this moving average and finish in positive territory with 0.83% of gains. The stock has been a rock star since its earnings. Yesterday's action showed some commitment. Look for potential upside follow-through at above $38.94.
Apple (AAPL) held its upper support at $462ish and closed well off lows yesterday. The longer it holds above $462, the higher probability we could see a move through $467 to set it back in motion. AAPL has been acting well since earnings and has regained some momentum.
Baidu (BIDU) also held its upper support floor of $132-133 showing some commitment to its recent impressive gains. BIDU was among the first stocks to bounce off of lows yesterday. It could see some continuation above $135.75. Use yesterday's low of $132.64 as the upper level stop.
Sina (SINA) also held above its 8-day showing relative strength. This is some healthy digestion after the stock just saw a big four-day move up from $64.97 to $75.75. The longer it holds above $72, the higher probability we could see some continuation to the upside. It has a good looking chart.
Under Armour (UA) had a big gap after earnings and digested above this gap well. The stock gave us an additional entry last Thursday and has been holding above its 8-day since. Look for potential upside follow-through above $70.34
Yelp! (YELP) gave us a nice trade at $51.30 yesterday afternoon after the stock built a nice base at $50.61. The stock held above the earnings gap and above its 8-day moving averages on the daily chart, which is constructive. It's worth keeping on the radar for some potential upside follow-through above yesterday's high of $53.15.
VMWare (VMW) has built a nice tight set-up since earnings while holding its earnings gap. The company announced a 700 million share buyback that could ignite the stock through the $83.50 additional buy area.
There are also some laggard type stocks that might be good for tactical cash flow off the lows.
Microsoft (MSFT) held where it needed to after the sharp sell-off post-earnings as $31 has proven to be a strong support level. The stock saw decent gains of 1.52% yesterday as dip buyers stepped in at $31.25 to give the stock a huge lift off of lows. Next resistance is sitting at $32.67 where it enters the earnings gap.
Intel (INTC) has been beaten up recently as it continued to meet sellers since the sharp sell off on June 19. It put in a doji at lows yesterday showing some changes in sentiment. We now have yesterday's low of $22.55 as the new pivot to trade against.
PotashCorp (POT) has been basing at $28.50-29 area for about a week or so after last week's sell-off. The stock picked up some momentum on Tuesday afternoon and continued to hold up well yesterday. The longer it holds above $28.50-29, the higher probability we could see some upside momentum as it could try to fill the gap from July 30.
Mosaic (MOS) has a similar chart pattern to POT, as both of these fertilizer stocks saw a sharp sell-off last week. MOS has been trying to hold the bottom level at $39.95. A move above $44, where the gap starts, could force some short sellers to cover and bring in some buyers.
Tesla (TSLA) delivered a great earnings report last night. Elon Musk continues to deliver. TSLA cleared the $145 pivot after hours and is now around $155ish, up around 17%. This has been great vehicle on every timeframe.
Just remember, some of the biggest winners in the stock market start off with very high valuations and are deemed expensive. As long as they follow strong trends, execute and generally follow growth projections, you can find yourself 2-3-4-5 baggers. They don't start as cheap value stocks.
Next Thursday, August 15th, T3 Live's Evan Lazarus and Rich Annunziata (the instructors in the T3 Live Active Trader Mentoring Room) are hosting a webinar - From Student to Teacher: The Active Trader Blueprint. In the webinar they will provide a window into the T3 Live methodology as well as a sample of the mentoring that takes place in the room.
*DISCLOSURES: Scott Redler is long VMW, POT, MSFT, FB, JPM, TSLA calls, IBM puts. Short SPY.
- Information Technology